Data’s rear view mirror—why a data company is using history to understand the present and future of rideshare

Ben Labaschin · April 3, 2018 · 7 min read

Rideshare as we know it has been around since 1910 and there is a significant, thematic correspondence between what it was then, and what is it today.

July 1st 1914 was a Wednesday—a work day like any other. It would be two more years before Congress established an eight-hour work day for railroad workers, twelve more before Ford Motor Company mandated the five-day workweek for its workers, and a century before millennials demanded ping-pong tables at the office.

On the streets of Los Angeles, people would have been rushing to catch the streetcars that took them to work. Not that anyone was particularly keen to ride them. It was well known that streetcars had a monopoly on urban transportation; a fact they didn’t hesitate to lord over patrons. Anyone who dared to complain about being packed like sardines into hot, metal streetcars in the middle of a California summer would be told to walk.

Not everyone was condemned to riding streetcars. Wealthy bluebloods in the Northeast first gained access to French-made automobiles almost twenty years earlier. But, like the newest iPhone or Elon Musk’s flamethrowers (look it up), only those with expendable cash could initially afford the latest technology.

For a few years, Henry Ford had made headway on this issue with innovative manufacturing practices. Vehicles that cost over $10,000 in the 1890s cost less than $1,000 by 1908, when the first Model T came off the line. Still, such prices were too steep for most workers in the recession era of pre-WWI America.

That was when L.P. Draper accidently began one of the fastest adopted transportation trend America had ever seen: ridesharing.

You read that correctly. Ridesharing began in the 1910s and it was huge.

Surprised? You’re not alone. Unless you scan university databases in your free time, it’s unlikely you would know about such a thing.

So how did it happen? As the story goes, Draper was driving along the streets of Los Angeles in his Ford Model T when, on a whim, he decided to pick up a stranger on the side of the road. For driving the stranger to his requested destination, Draper was paid all of five cents and the consumer-to-consumer ridesharing business was born.

Word of Draper’s new service got around and other drivers, recall that America had been in a recession, decided they too wanted in on the game. Within a year, drivers could be found from Los Angeles, California to Portland, Maine. At the peak of the movement it was estimated that more than 62,000 drivers worked as full-time rideshare providers.

Of course, people didn’t actually call it ridesharing. Like most popular activities given slang names at the time (the number of words for inebriation alone may explain the motivation behind prohibition), the practice of ridesharing earned its own old-timey name—“jitney.” Coined for the five cents consumers could expect to pay for a ride (the colloquial term for nickel was “jitney”), the concept of the jitney quickly became associated with the service itself.

Like so many American pastimes—baseball, Uncle Sam, and the Kardashians—the idea of consumer-to-consumer transportation soon became indistinguishable from the American spirit itself.

Writing of the phenomenon, one magazine of the time wrote, “Most folks helped pay for our paved city streets…and the jitney gives them a chance as nothing else ever did [to use them].” Some painted the jitney as the worker’s means of transportation, calling it a “new phase in the old struggle between class and mass.” Others claimed the movement ushered in “a new page in the history of locomotion when convenience and economy come together for the first time.” Not hyperbolic at all, 1910s media… something else that has survived for more than a decade.

What was called the jitney then, we call ridesharing now. As today, during its ascendency between 1914-1917, the jitney gained a significant market share almost as soon as those with cars were willing to drive riders who needed to travel.

But we don’t hear much about the jitney today. Ridesharing may be the jitney’s contemporary analog, but most people know ridesharing as a purely modern phenomenon—most people don’t know about the jitney.

The truth is, despite a three-year-reign as the fastest adopted mode of public transportation in US history, the novelty of the jitney grinded unsustainably against established business practices of the time.

It takes no stretch of the imagination to understand why. Barring streetcar monopolies, many of the entities that exist today—insurance companies, media outlets, and politicians—also existed at the time of the jitney. Then, as now, many of these institutions did not understand how to interpret the new risk associated with the emergent movement.

The jitney presented several challenges. Insurance companies had to figure out how to price the risk of quasi-commercial drivers. Media outlets had to weigh the public’s love affair with the jitney with emerging stories about passenger safety—people were being packed into cars on semi-paved roads. And politicians had to judge whether jitney drivers, who weren’t taxed, had an unfair advantage against the established transportation methods of the time (streetcars and railroads).

Almost as suddenly as the jitney arrived, it was gone. Insurance companies began requiring jitney drivers to pay liability bonds of up to $10,000. Media outlets turned on the drivers, painting the jitney as a reckless and antiquated activity. And the politicians? Well, they either outlawed the jitney outright, or simply made the practice too legally burdensome to do.

By 1918, only 6,000 jitney drivers remained.

Still, the question remains, is the story of the jitney even relevant, or is it simply a cute story used to ground the present to the past?

To those familiar with the industry, the story of the jitney really should read as more than the sum of its parts. Today we see the very same factors that brought down the jitney also challenging the rideshare market:

Established transportation providers point to an unfair advantage for rideshare, one that (they say) negatively impacts public safety and tax revenue

Politicians want to generate tax revenue while ensuring public safety

Insurers must understand this new risk if they are to effectively manage it

Consumers want cheap, convenient mobility options and they’re increasingly aware (thanks to the media) of the risks and social costs associated with rideshare

When we step back and analyze these trends, as we so often should, we see a significant, thematic correspondence between the rideshare that was, and the rideshare that is today. In the past, post-recession-afflicted workers depended on the jitney, today post-recession millennials rely on rideshare, too—this is a similarity that we should explore. To increase our confidence about the sustainability of the rideshare market, we need to fully consider the parallels between these historical tendencies and the implications that these common trends will have on the future of shared mobility.

Ben Labaschin

As an Economic Analyst, Ben Labaschin keeps Arity up-to-date on past, current, and future transportation trends. Ben’s always traveled in style, as his first car was a Black Mamba VW Beetle.